HOUSEHOLDS – ECONOMIC ASPECTS – AUSTRALIA

The rise of the female breadwinner

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 7-Mar-17

A Roy Morgan Single Source Survey has found that 52 per cent of Australian women reported being the main breadwinner in their household in the year to December 2016. This compares to just 39 per cent in 2006. The percentage of men who said they were the main income earner in their household has barely changed in 10 years (74 per cent in 2016 compared to 73 per cent in 2006). The main factor behind the increased percentage of women who are earning their household’s main income is the sharp jump in the average income being earned by females in full-time employment since 2006; up from $A51,000 to $A73,500.

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ROY MORGAN RESEARCH LIMITED

Home affordability shapes as key issue

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Original article by Matthew Cranston
The Australian Financial Review – Page: 11 : 22-Dec-16

Tim Lawless of CoreLogic says housing affordability is likely to be a major issue in 2017. CoreLogic has co-authored a report which shows that while 86 per cent of a household’s income was required to save a 20 per cent deposit for a home in September 2001, this had blown out to 139 per cent in September 2016. It has risen from 117 per cent to 168 per cent in Sydney over the last 15 years, and from 93 per cent to 143 per cent in Melbourne. Federal Treasurer Scott Morrison argues that insufficient housing supply is the main cause of unaffordability, a view shared by leading property groups.

CORPORATES
CORELOGIC AUSTRALIA PTY LTD, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN NATIONAL UNIVERSITY, URBAN DEVELOPMENT INSTITUTE OF AUSTRALIA, STOCKLAND – ASX SGP, FRASERS PROPERTY AUSTRALIA PTY LTD

Mortgage stress strikes bush, city amid fears of an interest rate hike

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Original article by Michael Bennet
The Australian – Page: 13 & 18 : 21-Dec-16

Standard & Poor’s has reported that the number of Australian mortgage borrowers in arrear rose in October 2016. Digital Finance Analytics has identified the 20 postcodes across Australia that boast the highest level of mortgage stress. Many of these are in regional areas, although the list includes a number of suburbs in major capital cities. Martin North of DFA says the outlook for interest rates will determine whether there is an increase in home loan arrears and defaults. He anticipates that the cash rate will rise by 50 basis points in 2017.

CORPORATES
DIGITAL FINANCE ANALYTICS, STANDARD AND POOR’S FINANCIAL SERVICES LLC, RESERVE BANK OF AUSTRALIA, WESTPAC BANKING CORPORATION – ASX WBC, ALLIANCEBERNSTEIN HOLDING LP, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, BANK OF QUEENSLAND LIMITED – ASX BOQ, CLSA AUSTRALIA PTY LTD

High incomes run up relatively less debt on major cards

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 13-Dec-16

A Roy Morgan Single Source survey has found that Australians aged 18+ who hold major credit cards (Visa, MasterCard and Amex) intended to carry forward to their next statement a combined average monthly debt of $A19bn in the year to October 2016. The survey also shows that people on annual incomes of under $A25,000 carry forward $A1,100 on average (8.9 per cent of their income). For the highest income group of $A250,000+, the average debt was $A2,500, or 0.9 per cent of their average income. The largest cardholder segment, with just over a third of the market (33.7 per cent), is the $A25,000 to $A59,000 group. Their average debt is $A1,400, or about 3.5 per cent of their average income.

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ROY MORGAN RESEARCH LIMITED, VISA INTERNATIONAL, MASTERCARD AUSTRALIA LIMITED, AMERICAN EXPRESS COMPANY

Banks on S&P negative watch over hot property

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 11 & 15 : 1-Nov-16

Factors such as rising household debt and residential property prices have prompted Standard & Poor’s to downgrade Australia’s economic risk trends. The firm has also downgraded the credit rating outlook of 25 local lenders to "negative". S&P downgraded the major banks’ rating outlooks to "negative" in mid-2016, but it has not yet made any further changes. However, their "AA-" credit ratings could be reviewed, particularly if Australia implements new global regulations regarding bank bailouts.

CORPORATES
STANDARD AND POOR’S CORPORATION, MACQUARIE BANK LIMITED – ASX MBL, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, BANK OF QUEENSLAND LIMITED – ASX BOQ, RESERVE BANK OF AUSTRALIA

Trade surge could cut $23b from deficit

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Original article by Jacob Greber
The Australian Financial Review – Page: 4 : 14-Oct-16

Australia’s 2016-17 Budget deficit is forecast to be $A63.2bn, but analysis shows that a sustained rise in commodity prices could slash the deficit by around $A23bn. The prices of coking coal, thermal coal and iron ore have risen sharply since August 2016, and Commonwealth Bank economist Kristina Clifton says the nation’s terms of trade would improve if prices remain at around current levels for the next six months. She adds that this would also have a flow-on effect on household incomes.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. DEPT OF THE TREASURY, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB

High reliance on two incomes to repay home loans presents a potential risk

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 20-Sep-16

Roy Morgan Research’s "State of the Nation – Spotlight on Finance Risk" report shows that Australian households with two incomes now account for 67.2 per cent of owner-occupied mortgages. Overall some 9.3 per cent of dual-income households are classified as "at risk" of mortgage stress. Meanwhile, 17.4 per cent of Australians (705,000) who have a mortgage on the home they are living in can be classified as being "at risk", based on an average interest rate of 5.4 per cent. Over the last 10 years, mortgage holders "at risk" peaked in May 2008 (32.7 per cent) when the standard variable home-loan rate was 9.45 per cent.

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ROY MORGAN RESEARCH LIMITED

Rate cuts ‘hurt some but overall we gain’

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Original article by David Uren
The Australian – Page: 21 : 16-Sep-16

A report released by the Reserve Bank of Australia suggests that official interest rate cuts have a net gain for the nation overall, despite the impact on savers. The report argues that each $A1 reduction in home loan repayments results in an average increase of at least $A0.20 in expenditure on consumer durables. However, spending on durables rises by just $A0.04 on average for each $A1 increase in the interest income of net savers.

CORPORATES
RESERVE BANK OF AUSTRALIA

Taxpayer funds hold up economy, families ease back

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Original article by David Uren
The Australian – Page: 1 & 2 : 8-Sep-16

The latest national accounts data shows that the Australian economic expanded by 3.3 per cent in the year to June 2016. It is now 25 years since the last recession in Australia, and Prime Minister Malcolm Turnbull has attributed the almost unprecedented period of economic growth to factors such as the nation’s commitment to free trade and economic reform. However, growth in household spending slowed to just 0.4 per cent in the June quarter, while growth in household incomes is also subdued. A sharp rise in government spending contributed to GDP growth in 2015-16.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN BUREAU OF STATISTICS, AUSTRALIAN LABOR PARTY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, EAST ASIA SUMMIT

Michele Levine, CEO, Roy Morgan Research, comments on the findings in State of the Nation 25: Spotlight on Financial Risk

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Original article by Roy Morgan Research
Market Research Update – Page: Online : 26-Aug-16

The end of the mining boom in Australia presents the Australian economy with many pressing challenges – and some of the biggest involve the potential for a slowing Australian economy to increase mortgage stress around the country, and also to lead to diminished superannuation balances for Australians heading towards retirement. The casualisation of the Australian work-force with an increasing proportion of Australians working part-time rather than full-time means many Australians are forced to save less for their retirement whilst the ability to pay current bills, including mortgage payments, is also crimped. In addition, the persistently low interest rates in Australia mean the amount required for retirement actually increases as annual returns on investments follow interest rates lower. Follow this link to view the full State of the Nation 25: Spotlight on Financial Risk Powerpoint presentation PDF.

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ROY MORGAN RESEARCH LIMITED